A government-appointed panel yesterday took the first step toward removing
Ron Carey as president of the 1.4 million-member union for his alleged
involvement in the spreading financial scandal surrounding his reelection
campaign last year.

The Independent Review Board, which has the power to remove Carey from
office, released its findings just hours after he announced he would temporarily
step aside as union president to fight an earlier government decision disqualifying
him from running in a special rerun election against rival James P. Hoffa.

The IRB action is the biggest blow so far to Carey's embattled presidency,
leaving the onetime champion of the Teamsters's reform effort facing the
possibility of being banned from the union to which he has dedicated his
entire working life.

Federal officials recently threw out Carey's narrow 1996 victory over
Hoffa and ordered a new election after concluding that Carey's campaign
was illegally financed.

Carey also is under investigation by a federal grand jury in New York
City. Three top Carey campaign operatives have pleaded guilty to criminal
charges that they conspired to divert money from the union's general treasury
to his campaign.

Yesterday's events move the nation's second-largest union closer to
again becoming a ward of the federal government, which has worked for nearly
a decade to rid the Teamsters of corruption. With Carey gone, and the union's
political leadership in turmoil, the government finds itself having to
place monitors inside the union to oversee its day-to-day operations.

Efforts to reach Carey's attorney, Reid Weingarten, for comment on the
IRB action yesterday were unsuccessful. Earlier in the day, before the
IRB announcement, Weingarten said Carey was taking leave because he was
"placing the interests of the union and the reform movement above
his own. And he expects to be fully vindicated when he finally gets his
day in court."

The three-member review board, which includes former FBI director William
H. Webster, accused Carey of participating in a scheme to funnel money
from the union's general treasury to his reelection campaign. The board
concluded that he authorized $735,000 in Teamsters contributions last year
to three outside political action groups -- Citizen Action, Project Vote
and the National Council of Senior Citizens -- "knowing the contributions
would result in a personal benefit to you in money to pay expenses for
your reelection campaign." Carey has denied any wrongdoing in connection
with the scheme.

The board's complaint now goes to the union's general executive board
for action. The executive board can issue its own ruling or refer it back
to the IRB. If the IRB does not like the way the union resolves the case,
it can take it back and issue its own ruling.

Teamsters spokeswoman Nancy Coleman said the union would not have an
immediate response. The general executive board has seven days to respond.
Carey has a right to contest the IRB findings.

The complaint essentially tracks the findings of Kenneth Conboy, a special
elections officer who last week disqualified Carey from seeking reelection.

The review board action came less than 24 hours after the Justice Department
appointed a special independent auditor to oversee the day-to-day spending
by the union and to examine all the union's finances.

The Teamsters have been operating under government supervision since
1989, when the union signed a consent decree giving the Justice Department
oversight of its operations. The agreement settled the government's civil
racketeering suit accusing the union of being a wholly owned subsidiary
of organized crime. Carey was first elected president in 1991 as a reform
candidate under election rules set down by the government.

In its 41-page complaint, the IRB said that it did not believe Carey's
statements that he had no memory of approving any of the money used in
the campaign swap schemes.

The IRB said that in one four-week period last year Carey approved $1.5
million in union financial transactions. "His claim one year later
that he has no memory of the actual approval of any of these appears to
be incredible given their unprecedented size and their relation to the
federal election, a special event. Carey's lack of memory is less believable
because he admitted it was rare that he would personally approve expenses
so these were not routine events in a blizzard of approvals."

The review board said that as president of the union Carey violated
his "fiduciary obligations to the members in his stewardship over
the union's money." The board said the fact that Carey failed to inquire
about a number of the financial transactions in question "supports
an inference that he deliberately closed his eyes and thus had knowledge."

Earlier in the day, the union announced that Carey would be taking a
temporary unpaid leave of absence while he fought the disqualification
ruling. Under the union's constitution, Secretary-Treasurer Tom Sever will
take over the duties of the general president's office while continuing
to serve as secretary-treasurer. No other leadership changes were necessary
as a result of Carey's action.

Carey also will step aside as president of Local 804 in New York City,
a post he continued to hold after his election as general president in
1991.

Federal authorities also are investigating allegations by the Carey
camp that the Hoffa campaign violated election rules. The new election
for Teamsters president has been postponed until at least May 1, while
the Hoffa investigation is underway.